Over the past 10 years or so, businesses have been fighting to show up on the first page of Web search results. And for good reason: Over 850 million searches are performed each day on the Internet, and in 85% of those searches, the person looking doesn’t go beyond page one of the search results.
While showing up in the “natural” search results is most coveted (since 70% of people searching click on these natural results), it is also very difficult to secure due to competition and the ever-changing formulas used by the search engines.
Then came pay-per-click. In the pay-per-click advertising model, advertisers create text ads that typically appear on the top right-hand side of a search results page under the heading “Sponsored Links.” Advertisers bid competitively on keyword search phrases, and the bid determines the position of the advertiser’s text ad; the higher the bid, the higher the position. Each time the ad is clicked on, the advertiser pays the search engine a “per click” fee, which can range from 10 cents to over $20. While pay-per-click advertising can increase visitors to your website, it doesn’t necessarily increase sales or leads. Consider this hypothetical: Say an online advertiser spent $500 and received 1,000 clicks ($.50 cost-per-click) but got only two orders. That might be acceptable if the average order was $1,200; however, what if the average order was $9.95?
Enter pay-per-call advertising, a new type of online advertising that mixes search functionality and on-the-phone interaction. It’s an appealing marketing opportunity for small businesses — especially local businesses without a website. Pay-per-call advertising, also referred to as click-to-call, connects online-search consumers with your business by phone. You don’t need a website to participate because pay-per-call ads, which prominently appear in search results pages, drive business directly to your phone. Online consumers call a toll-free number that forwards calls directly to your business number and also tracks calls for billing and reporting purposes. You set a maximum price that you are willing to pay per call from a potential customer. Pay-per-call is free for consumers to use. While it offers no guarantee of sales either, it has the advantage of putting the business in a two-way conversation with the prospect.
Setting up a pay-per-call campaign is easy. To set up an account, you simply provide your billing information and set spending parameters and budgets. Merchants choose their relevant keyword phrases, select their desired category and decide upon the geographic area where they’d like their ad to appear (local, regional or national). From there, an ad is created by the advertiser containing their company name, address and a short description, as well as a track-able toll-free number (assigned by the pay-per-call provider), which redirects to the advertiser’s actual phone number. Par-per-call results are distributed across local search providers, Internet Yellow Pages and vertical directories.
Pay-per-call is much more expensive than traditional pay-per-click advertising, The Wall Street Journal noted recently that Google’s average pay-per-click price was about 50 cents. Pay-per-call starts at about $2 per call. However, pay-per-call allows merchants to talk directly with prospects person-to-person, figure out their needs and build immediate rapport. In addition, small business owners have an easier time tracking their on-phone con-version rates than their Web conversions, according to a joint study by Ingenio and Jupiter Research.
How much better is the conversion rate with pay-per-call? According to a Search Engine Marketing Professional Organization (SEMPO) case study, an Atlanta online floral service closed 1 in 25 visitors through pay-per-click versus 1 in 3 with pay-per-call. The click cost rate was $.65 each and the pay-per-call cost rate was $4.15, with the average sale being $67. Ingenio (www.ingenio.com) is the pioneer of the pay-per-call industry. Since its inception, Ingenio has connected more than 2 million buyers and sellers, and today it produces approximately 20 million e-commerce minutes each quarter. Companies using Ingenio’s web-to-phone technology services include AOL, MIVA,SMARTpages.com, AttorneyPages.com, Microsoft, CPAdirectory and the IRS.
It’s doubtful that pay-per-call will completely replace pay-per-click in the local market. However, pay-per-call does have a very specific niche for businesses without a website, or for businesses that don’t have the time, capital or knowledge base for a fully optimized Internet marketing campaign. For merchants already using pay-per-click, pay-per-call provides another smart advertising channel.
Of course, you must consider potential staffing issues. What good is it if your phone rings but no one is available to answer it? Or worse, what if the person answering your phone is not knowledgeable enough about your products or ser-vices, or isn’t a salesperson? Do you need to extend your call service hours to compensate for other time zones?